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As Bitcoin price valuation nears the $65,000 mark, the asset has caught the attention of market analysts, with one recently highlighting a key indicator that now suggests a potential further rally in BTC price.
In particular, according to a recent article published on the CryptoQuant Quicktake platform by an analyst under the pseudonym “Darkfost,” the Bitcoin Stock-to-Flow (S2F) return chart is now showing a major buy signal for Bitcoin.
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S2F Signal Prime Buying Opportunity
The S2F model is widely used to predict the price of Bitcoin by measuring its scarcity. It indicates whether the market is leaning towards a buy or sell zone based on its supply rate.
Darkfost explained that the S2F reversion chart now signals a potential buying opportunity, with the SF ratio moving below 1, representing a green zone.
This area suggests that Bitcoin may be undervalued relative to its historical trend, making it a potential time to accumulate BTC.
The analyst explained that the last time Bitcoin entered this buy zone was in June and September 2023, followed by notable price recoveries.
Investors who took positions during these periods saw favorable returns as the price of Bitcoin rose in the following months.
It is worth noting that the predictive nature of the S2F model has often been a major tool for traders looking to capitalize on Bitcoin’s long-term trends. In addition to its move below 1, when the SF ratio climbs above 1, it signals a red zone or a profit-taking opportunity.
Bitcoin Price Evolution and Key Technical Levels
In addition to the S2F signal, Bitcoin’s price action over the past few days is also a result of recent macroeconomic events, including the US Federal Reserve’s interest rate cut.
Following the 50 basis point rate cut on Wednesday, Bitcoin surged above $64,000 in the early hours of the day, marking a significant rally given that the asset was previously in a bearish and accumulation phase.
However, as of now, the cryptocurrency has pulled back slightly from its 24-hour high above $64,000 and is trading at $63,036, down just 0.1% over the past day.
Meanwhile, despite the S2F return chart indicating a potential buying opportunity, another crypto analyst, Ali, expressed concerns about Bitcoin’s short-term future.
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In a recent article on X, Ali highlighted Bitcoin’s current position relative to its 200-day simple moving average (SMA), a key indicator for determining the strength of a market trend. Bitcoin is currently testing this level, which has historically been a key factor in confirming a bullish trend.
Ali noted that previous failures to reclaim the 200-day moving average, as seen in 2020, 2018, and 2014, have led to significant price corrections. If Bitcoin fails to hold above this level in the coming days, it could signal a broader market downturn.
However, if it holds its support, Bitcoin could continue its upward trajectory, paving the way for further gains.
Featured image created with DALL-E, chart by TradingView
